The prospect of falling condominium rents in Metro Manila is putting the spotlight on how landlords manage vacancies, set lease rates and protect returns as excess supply intensifies competition for tenants.
Monthly rents for studio units could drop to as low as P5,000 within the next 12 months from around P30,000, according to a forecast by David Leechiu, co-founder and chief executive of Leechiu Property Consultants.
However, Anthony Leuterio, founder of Filipino Homes and Rent.ph and president of A Better Real Estate (ABREP), disputed the projection, arguing that rental performance depends on more than supply and asking prices.
“I don’t agree with Leechiu,” Leuterio said.
“Rental is not just about pricing. It’s about marketing, demand, and professional management,” he added.
The disagreement highlights a business challenge for property owners: whether to lower rents to compete for tenants or improve leasing strategies to protect recurring income.
Leuterio cautioned against applying conditions in oversupplied segments of Metro Manila’s condominium market to the broader rental sector, saying performance varies by location and property type.
He said disappointing returns may also reflect ineffective marketing, unrealistic pricing, inadequate tenant screening and weak property management, rather than a lack of demand alone.
Although rent reductions may help landlords fill vacant units, indiscriminate cuts could erode income if owners fail to assess competing properties, prevailing lease rates and alternative marketing strategies.
The issue also extends to real estate agents’ incentives. Leuterio said some agents may prioritize securing tenants to earn commissions instead of maximizing landlords’ long-term returns.
He argued that rental professionals should be assessed not only on their ability to close lease agreements but also on their capacity to sustain occupancy, protect rental income and preserve property values.
“Instead of creating fear, we should encourage property owners to rely on actual market data and professional rental management. We should protect investors’ interests, not undermine their confidence,” he said.
Leuterio called for rental rate studies, more reliable market data and wider use of professional property managers in residential buildings to help landlords set competitive prices and make informed investment decisions.
He also pointed to population growth across Metro Manila and Luzon, alongside households unable to afford homeownership, as factors supporting demand for rental housing.
However, the strength of that demand depends on affordability, the location of available units and whether rental rates match prospective tenants’ budgets.
For investors, advertised rental rates alone do not determine the profitability of a property. Occupancy levels, vacancy periods, operating expenses and management costs all affect net rental income.
Oversupply can put downward pressure on lease rates, but the extent of any decline depends on the volume of available units in a particular location, competing developments and actual tenant demand. Lease transactions and vacancy rates are therefore important indicators of whether falling rents reflect a wider market trend or weakness concentrated in specific segments.
Leuterio said the real estate industry should give leasing and asset management the same strategic attention as property sales, treating rental operations as a long-term business rather than a means of generating immediate commissions.
Professional management and disciplined pricing could help landlords navigate intensifying competition, but they cannot eliminate the effects of genuine oversupply or weak demand.
For property owners and developers relying on rental income, the challenge is to balance competitive lease rates with occupancy and operating costs while basing investment decisions on actual market conditions.
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